Former President Thabo Mbeki loved quoting Shakespeare.

It’s been a while since we had a politician in office with a literary fixation, but it looks like finance minister Tito Mboweni is here to fill that gap.

His author of choice? Charles Dickens.

In his first speech, he gave us A Tale of Two Cities – “it was the best of times, it was the worst of times”.

More recently, in the 2019 medium-term budget speech, he described South Africa’s State-Owned Enterprises as akin to Oliver Twist asking “please, sir, can I have some more”.

Oliver Twist spends a fair amount of time working for a criminal organisation that steals money and other valuables so it’s not a bad comparison.

(Zapiro gets it, too.)

Mboweni also mentioned the country’s government wage bill – something that eats away at the largest portion of South Africa’s budget.

BusinessTech provides us with some insight into why that’s the case:

The government’s wage bill accounts for the largest portion of the national budget at 34%. This means for every R1,000 government spends, R340 goes to employee compensation.

According to National Treasury, between 2006/07 and 2018/19, total compensation spending on the main budget has more than tripled, from R154 billion to R518 billion. Above-inflation remuneration increases accounted for the largest proportion of this spending, it said.

Let that sink in. If you’d like a visual representation of where every R1 000 spent by the South African government is going, head here.

The average salary in the public sector is higher on average than the rest of the economy and the finance minister says there’s very little he can do about it.

Data from Statistics South Africa’s Quarterly Employment Survey (QES) shows that average remuneration across 110 non-agricultural sectors and sub-sectors in 2018/19 was just under R273,000, compared with an estimated average remuneration of R352,000 for employees of national and provincial government.

By National Treasury’s calculations, the actual level of average remuneration for these employees is even higher – around R393,000.

The Treasury estimates that public servants earn roughly 20% of all wages in the non-agricultural sector. Furthermore, salaries for civil servants has grown by roughly 40% over the last decade, with an average yearly increase of 8% since 2010/11:

The public service sector seemed to do particularly well in the last few years of the Zuma administration.

Between 2006/07 and 2018/19, the number of public servants earning R1 million a year increased from 9,600 to 29,000,

Mboweni said that the only way to combat this massive drain on the budget is to narrow the country’s deficit and reduce the wage bill.

Government has tried to cut down on employee numbers in the past by offering early retirement packages, but it didn’t work. Other attempts to cut back were met with backlash from unions.

This is starting to sound a lot like what’s happening at Eskom – too many workers, not enough cash, and a lot of angry unions.

Mboweni says that we’ll know more about government’s plans to cut back in the full 2020 budget speech.

I’m looking forward to seeing which Dickens quote sums up next year’s problems.

My money is on something from Great Expectations.

[source:businesstech]